Policy and practical implications for workforce nationalization in the Gulf Cooperation Council (GCC) countries

Abstract

PurposeThis study aims to advance practice and research on workforce nationalization in the Gulf Cooperation Council (GCC) countries through identifying relevant policy and practical implications needed to implement nationalization initiatives effectively.Design/methodology/approachThe author followed a two-stage approach. Stage 1 reviewed the literature to identify relevant papers on workforce nationalization in the GCC region. Stage 2 used a thematic analysis to propose relevant implications for both policy makers and employers.FindingsThrough the lens of four perspectives at different levels, i.e. legal, organizational, human development and socio-cultural perspectives, the author has identified ten policy and practical implications. Both governments and employers need to consider these when developing holistic strategies for effective workforce nationalization.Originality/valueOver several decades, the GCC countries have been implementing several nationalization initiatives to increase the percentage and qualifications of their national employees. The significance of these initiatives stems from the fact that the GCC countries lack adequately trained citizens. Moreover, regardless of political attitudes toward foreigners, development plans for modernization, industrialization or urbanization heavily relies on foreign employees. This is because nationals represent the minority of employees and are largely employed in the public sector. This phenomenon needs the attention of scholars to discuss different aspects of nationalization and how to effectively implement it.

Bringing it all back home: the HRM role in workforce localisation in MNEs in Saudi Arabia

“…The advantages of improving efficiency, legitimacy and resilience in crisis situations may be there, but localisation polices across the Arabian Gulf had, pre-2020, hardly impacted MNEs (Barnett et al, 2015). Even governments' applying stricter quota-driven approaches had little effect (Elbanna, 2022). Some MNE started employing nationals to 'make up the numbers' in order to avoid penalties, but they were often given 'shadowing' or non-jobs and it was unclear what else could be done (Forstenlechner, 2008).…”

“…While laws and regulations may act as compelling forces driving MNEs to increase their level of workforce localisation, the process will not be successful unless it is supported by effective HRM practices to facilitate recruitment, placement, and development of local talent (Elbanna, 2022). Mellahi and Wood (2001) show how socio-economic and political contexts shape HRM policies and practices, emphasising that the labour market structure and localisation policies are key factors.…”

“…Despite the positive effects of localisation for HCNs, and its implications for MNEs' performance and legitimacy in the host country, research in this area remains scarce and equivocal (Elbanna, 2022). In particular, we lack empirical evidence that identifies the factors associated with the success or failure of such policies.…”

“…We examine the role of HRM in the success of localisation policies in the petrostate of Saudi Arabia. The Arabian Gulf states have sizable expatriate workforces and localisation has recently become a priority public policy supported by strict affirmative action laws and regulations (Elbanna, 2022). The reliance on expatriate workers despite unemployment among national citizens gave workforce localisation policy in Saudi Arabia and other oil-rich countries in the region a political dimension, even to it being classified as a national security matter (Harry, 2007), with resentment among the local citizenry and increasing pressure on the government to create jobs and to ensure that employers prioritise the hiring of national citizens over expatriates (Assidmi & Wolgamuth, 2017).…”

Development of Gulf Cooperation Council human resources: an evidence-based review of workforce nationalization

“…One current issue in workforce planning is nationalization. A special form of workforce nationalization has emerged in the Gulf Cooperation Council (GCC) countries; one which aims to encourage the development and employment of national employees and has become an increasingly important national concern because of the heavy reliance on expatriates in the GCC labor markets (Elbanna, 2022;Elsharnouby et al, 2023;Tee and Li, 2022). Given this, the governments of GCC countries have recognized the need to focus on workforce nationalization in their development and have adapted a set of strategies for developing local employees in order to rely less on skilled expatriates (Al Jawali et al, 2022).…”